Marijuana social clubs dwindle as legal confusion reigns

Marijuana social clubs around the state are operating in a legal gray area as neither prohibited or expressly authorized under state regulations. Local governments have crafted their own ordinances attempting to ban them in the meantime, as the state Legislature has shown no indication to take up the issue and a bill that would ban smoking, effectively banning the clubs, looks to be dying in committee. Photo/DJ Summers/AJOC

Anchorage’s Pot Luck Events is the only marijuana social club still operating without a legal challenge, as statewide puzzlement to their legality produces a patchwork of local controls.

Fairbanks’ The Higher Calling and Homer’s Kachemak Cannabis Club have both closed, and the City of Kenai is seeking an injunction against Green Rush Events.

The clubs, which allow dues-paying members to share and consume cannabis but do not sell it themselves, inhabit either a murky legal area or a clearly defined one, depending on whom you ask.

The Marijuana Control Board and several localities have asked the state to clarify the law, but the Legislature’s only action on marijuana clubs has been a statewide smoking ban that incidentally applies to marijuana clubs and has stalled in the House Judiciary Committee chaired by Rep. Gabrielle LeDoux, R-Anchorage.

Marijuana social clubs are distinct from marijuana cafes. State regulations allow for onsite consumption at locations attached to retail cannabis stores. The state hasn’t yet issued any retail licenses, however, and these onsite marijuana cafes will have to wait until late 2016 to open along with the rest of the commercial marijuana industry once a legal crop is available to sell.

In the meantime, localities deal with marijuana clubs on their own in the absence of clarity from the Alaska Legislature.

Down to one

Of the state’s marijuana social clubs, Pot Luck Events alone is both open and without any pending legal challenge.

In early April, The Higher Calling club in downtown Fairbanks closed its doors. Owner Marcus Mooers said the club closed due to low membership, not political pressure, having had too few members to sustain itself.

Homer’s Kachemak Cannabis Club closed in March, on the heels of the Homer police chief’s conversation with Marijuana Control Board director Cynthia Franklin, during which she told him clubs are illegal. Chief Mark Robl said the club closed for internal reasons, the city had not initiated any kind of action to close it, and had planned to use enforcement as a last resort.

Other clubs are still open, but only until the locality fulfills its intent to close them.

In early April, the Kenai city council directed city attorney Scott Bloom to seek an injunction against Green Rush Events. The council decided the club violates an ordinance passed by the Kenai council in January that placed a moratorium on clubs.

The ordinance specifies that in the absence of state clarity, it is taking matters into its own hands.

“It is in the best interest of the City of Kenai to establish a moratorium prohibiting the consumption of marijuana and marijuana products in Retail Marijuana Stores and Marijuana Clubs, until further guidance is provided by the Marijuana Control Board or State Legislature ensuring minimum health and safety standards are met to protect consumers,” reads the ordinance.

Bloom said Green Rush Events has since switched its business model; it now charges nothing for entry, and sells no beverages. Bloom will determine whether or not this violates ordinance and issue an injunction accordingly. In the meantime, the club is still open.

Confusion reigns

Authorities have no public consensus on marijuana social club legality. State marijuana officials disagree while local officials flip-flop between marijuana club prohibition and allowance.

Franklin says clubs are clearly illegal, but city officials, newspapers, and the chairman of the Marijuana Control Board are under the impression they aren’t.

Throughout the marijuana regulation process, Franklin has stayed resolute that marijuana clubs violate regulation, which forbids cannabis consumption in public places, defined as “any place to which the public or a substantial portion of the public are invited.”

Club owners say Franklin’s interpretation is incorrect, as their clubs charge membership fees and are only open to patrons over the age of 21, making them private businesses, not public places. Franklin argues this makes them no more private than a movie theater.

Bruce Schulte, chairman of the Marijuana Control Board, has repeatedly emphasized that the board has not made social clubs illegal and awaits legislative action to establish the license type or to ban them.

The board struck down a proposed club ban in 2015 and issued a ruling that it had no authority to regulate one way or another. Ballot 2, which legalized recreational marijuana in Alaska through a voter initiative in 2014, does not specify social clubs as a license type. The board’s authority to regulate clubs depends on the Legislature changing statute to add the license.

If clubs are indeed illegal, the state has remained silent at the enforcement level.

No state law enforcement agencies have brought any charges against clubs or their patrons. This differs from other marijuana businesses that fell against state legal action.

The owners of Discreet Deliveries, Alaska Cannabis Club, and Absolutely Chronic Delivery Company, three companies the state alleges sold cannabis without state licenses, were each charged with felonies in 2015.

The uncertainty leaks down to the municipal level.

When Kachemak Cannabis Club was burglarized in mid-February, Homer Chief of Police Mark Robl said his force wouldn’t take action against the club’s existence, the Homer News reported.

“That’s the board’s position. Right now they’ve reached an impasse where these clubs are not expressly permitted or prohibited,” Robl said. “They’re allowing them to operate provided here’s no proof of other violations of law.”

However, only weeks later on Feb. 25, Alaska Public Media reported Robl said he’d had a misperception that clubs were not illegal, and learned otherwise from an unnamed “Alcohol and Marijuana Control Board member.”

In a later interview with the Journal, Robl revealed the member he spoke with was Franklin.

Robl’s new legal interpretation had no chance to be implemented, however, as the club closed down of its own accord in March.

The Fairbanks club went through a tangle of local control attempts. Fairbanks Councilman David Pruhs sponsored a measure that would have banned the club, then withdrew it in mid-January. Pruhs said the state needs to decide.

“I am giving the people of this industry time to work with the state and rectify this one way or another. I don’t believe in shutting down a business so soon when there might be a chance that this could become a legal activity,” he said at the time.

After the ban’s withdrawal, The Higher Calling continued operations until it folded in late March. Even with Pruhs’s ban withdrawn, however, the borough still had concerns.

In an April 7 editorial, the Fairbanks Daily News-Miner responded to a proposed ordinance from Fairbanks North Star Borough Assemblyman Christopher Quist that would ban all marijuana businesses without state licensure.

“It’s hard to blame Mr. Quist for wanting to provide that clarity at a borough level, given the number of businesses capitalizing on the loophole and the inaction on it thus far,” reads the editorial.

“But the state is the authority that should make the determination, and the borough should take its lead from that decision. It’s past time for the matter of marijuana clubs to be sorted out.”

The Anchorage Assembly had planned to discuss marijuana social clubs, but member Ernie Hall advised them during March 22 to halt marijuana considerations after a conversation with Franklin, during which he was advised that the state is still considering several marijuana-related items.

State silence

With most legislative bandwidth taken by a $4.1 billion budget deficit, the Legislature has stayed away from marijuana clubs. No bill to create a license type has surfaced, nor any plans to craft one.

The only bill directly pertinent to clubs has stalled and shows no sign of movement before lawmakers adjourn. Rather than directly addressing the licensing issue, the bill incorporates a de facto public marijuana smoking ban into a larger anti-smoking measure.

The pair of anti-tobacco bills had moved successfully through both chambers, but stalled in the House Judiciary Committee. House Bill 328 and companion Senate Bill 1, would enact a statewide ban on smoking in any public place except tobacco stores deriving 90 percent of their income from tobacco sales.

The bill includes vape pens, e-cigarettes, and any other “plant intended for inhalation.”

An amendment from Rep. Adam Wool, R-Fairbanks, that would exempt marijuana businesses hasn’t yet been adopted.

LeDoux, the Judiciary chair, has not scheduled a bill hearing during the Legislature’s final week.